This proposal marks the first step at implementing Governance Mining in Balancer. The programs mentioned below represent genesis incentives to be iterated, evolved and implemented with support from the community.
We propose that a small portion (~3k BAL) of the 145k BAL distributed weekly through liquidity mining be used for Governance Mining programs through the implementation of a community-lead Governance Committee.
Governance Mining will feature both programmatic and manual distribution at inception, consisting of BAL incentives relative to the different contributions to the network.
Strong governance is a crucial foundation for any DeFi protocol, and one that deserves to be encouraged as we look to champion quality contributions around ways that Balancer can be used in the wider ecosystem and novel ways to bring community together.
As one of the early pioneers in liquidity mining, it’s important to recognize that strictly distributing tokens to LPs favors passive participation rather than active contribution.
Governance Mining represents the first step towards rewarding community members for actively participating in governance through a number of mechanisms.
Governance Mining will consist of a number of ongoing programs, starting with:
- GovFactor - Added BAL factor to addresses that have voted on the most recent governance proposal.
- Forum Contributions - Leveraging SourceCred to distribute BAL to those who are leading thoughtful discussion on this governance forum.
- Governance Committee - Seeding trusted community members with ownership of Governance Mining rewards to be allocated and managed through BAL governance.
- Discord Engagement - Enabling BAL tipping for education and a longer vision to allow Discord roles to unlock tiered-access to new proposals and governance discussions.
- Proposal Farming - Fixed BAL incentives to those who create a proposal that is implemented through governance.
The combination of onchain and offchain programs creates a powerful dynamic where actors can contribute to Governance Mining in whatever they see fit, with active participants being able to capture value from multiple programs in parallel.
The GovFactor acts as an on-chain voting incentive for one of the protocol’s most important contributors: Liquidity Providers (LPs).
We’re proposing to implement a GovFactor for Liquidity Providers who vote on proposals, boosting BAL liquidity mining rewards while creating a unified incentive for those that service the protocol to become active governance participants.
While the exact numbers are to be discussed, we’re proposing a GovFactor of between 1.1 - 1.25x, providing a moderate boost on an LP’s BAL incentive.
The factor will function as an on/off switch where if the Liquidity Provider voted on the last on-chain proposal, their GovFactor is “on’’ and they receive the incentive boost on their weekly BAL distributions. If the LP did not vote on the last proposal, the GovFactor is “off” and the LP forfeits the bonus BAL.
The GovFactor’s on/off nature creates a constant incentive for LPs to always be active in governance and aligns the LP with the core purpose of the BAL token - governance rights.
It’s important to note that this incentive does not come out of the Governance Mining program and only acts as a factor towards the existing liquidity mining program.
The Balancer project should be led by a combination of the core team, token holders and community members alike, representing a diverse group of stakeholders with a shared interest in the long term sustainability and growth of Balancer.
This group will be responsible for managing and distributing the Governance Mining treasury with the hopes of programmatically distributing the allocation over time.
The Governance Committee will be made up of a fixed number of participants, consisting of an equal split between team, investors, partners and community members.
This structure can be expanded over time, decentralizing the control of the Governance Committee, these members will be incentivized with ongoing BAL distributions.
Over the next week, we plan to provide an open call to the community, asking those interested in joining the committee to make a request for their own role. These responses in tandem with feedback from the Balancer team and community liaisons will be used to select the genesis members pending community approval.
The Balancer governance forum is the home to the most important discussions and Balancer Improvement Proposals (BIPs).
This program looks to offer a fixed amount of stablecoins per month to those contributing in meaningful ways, measured using SourceCred to track aggregate likes, posts and engagement across all topics.
Balancer’s SourceCred instance should be heavily weighted towards the amount of likes received across all posts, rather than the quantity of contributions.
Inspired by Maker’s SourceCred trial, we believe this program gives active community members a way to earn from value added-conversations, as posts that receive the most likes, replies and tractions stand to capture the largest share of rewards.
Should the signal of this program be favored by the community, the next step is to present the formula used in the Balancer SourceCred instance to be ratified through a Snapshot vote.
We’ve noticed community members on Discord playing an active role in educating new users on the ins and outs of Balancer and want to create mechanisms for those actions to be easily validated and rewarded.
The first instance of Discord Engagement will implement native tipping to the Discord server, allowing anyone to send BAL to other community members for actions they deem to be valuable. This is likely to be initially leveraged by the Balancer team and larger token holders as a way to show gratitude to the most engaged community members.
The second instance will look to add a BAL emoji that allows community members to share a weekly allocation of BAL based on the amount of emote reacts received throughout the server.
This program looks to serve as an ongoing medium for community members to better share BAL amongst one another, with future ambitions to include a permissioned structure for token-based roles and channel access using tools like Collab.Land.
Governance Mining will look to allocate a fixed BAL reward to community members that submit a proposal that passes a governance vote.
This program aims to incentivize the creation of new proposals, while BAL incentives are only allocated to proposals that are adopted and implemented by Balancer.
Governance Mining Allocations
BAL allocated to Governance Mining should primarily be funded as a portion of the weekly 145k BAL distributed through liquidity mining, sent directly to the Governance Committee to decide on allocations and distribution schedules.
The specifics of each of the above mentioned programs, along with their exact release date should be discussed in line with community feedback and ratified through an onchain vote.
Timeline & Next Steps
We have proposed this plan on the forum to encourage active conversation around all the topics above. The rough timeline would be to implement Governance Mining at the start of January, giving the community ~a month to discuss, finalize and implement the proposed programs.
Outside of this forum, further discussions around the aspects of this proposal will live in the #governance channel on Discord.
We look forward to your feedback and are excited to be an early adopter of governance incentives to foster a healthy and active community of BAL holders!